Your dire predictions of financial failure already happened in 2008. There was more private debt denominated in US dollars in the system than there was hard currency to retire that debt. To avoid a mass liquidation of real assets to satisfy the debt we simply made more currency and injected it into the banking system.

It didn't extract money from the private sector in taxation to "fund" the spending, as that would have only created instant deflation and depression. The Fed used its shared balance sheet with Treasury to purchase the "garbage" debt with new money creation. No one's tax dollars were used.

The garbage was taken out and the economy was "somewhat" reset to a better state from where it was prior to the derivative fiasco. It cost us about $7 Trillion in lost productivity, but that was greatly preferable to a complete collapse of the banking system.